Objective To investigate the effect of modified Liangxue Wuhua decoction combined with LED red and blue light in the treatment of facial allergic dermatitis and its influence on skin barrier function and inflammatory indexes. Methods From May 2022 to May 2024, 87 patients with facial allergic dermatitis admitted to Jinan Dermatosis Prevention and Control Hospital were selected as the research subjects. According to the different treatment methods, they were divided into control group (42 patients) and observation group (45 patients). The control group was treated with LED red and blue light, and the observation group was treated with modified Liangxue Wuhua decoction combined with LED red and blue light. The clinical efficacy, skin barrier function, inflammation indexes and safety were compared between the two groups. Results The total effective rate of the observation group was 91.11%, which was higher than 73.81% of the control group, and the difference was statistically significant (P <0.05). After treatment, the stratum corneum hydration and sebum content in the observation group were higher than those in the control group, and the transdermal water loss, interleukin-4, interleukin-13 were lower than those in the control group, and the differences were statistically significant (P <0.05). There was no significant difference in the incidence of adverse reactions and recurrence rate between the observation group and the control group (P >0.05). Conclusion Modified Liangxue Wuhua decoction combined with LED red and blue light can effectively improve the skin function and clinical symptoms of patients with facial allergic dermatitis, improve the therapeutic effect, reduce the level of inflammatory factors, and have good safety.